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1. The Bank of Canada\'s role and functions Aa Aa The Bank of Canada\'s target f

ID: 1110964 • Letter: 1

Question

1. The Bank of Canada's role and functions Aa Aa The Bank of Canada's target for the annual rate of inflation is: O 0-2% 1-3 % 2-4% The Bank of Canada's major monetary tool involving buying and selling of government bonds is called the . In order to decrease the number of dollars in the Canadian economy (the money supply), the Bank of Canada will Canadian government bonds. Which of the following are functions of the Bank of Canada? Check all that apply. Acting as a lender of last resort to banks Providing loans to developing economies Monitoring political campaign finances Collecting personal and corporate income taxes

Explanation / Answer

Answer:- The bank of Canada's target for the annual rate of inflation is

Correct ANswer;- 1-3%

Reason:- The annual inflation rate of Bank of Canada is 2% with ±1% thus the inflation range becomes 1-3 %.

Answer:- the Bank of Canada's major monetary tool involving buying and selling of government bonds is called the

Correct Answer:- Open Market Operation

Answer:- in order to decrease the number of dollars in the Canadian economy ( the money supply), the Bank of Canada will .................Canadian government bonds

Correct Answer:- Sale

Reason:- Selling government bonds will decrease the money supply as people will spend their excess money in buying these bonds

Answer:- The correct option is:-

Acting as a lender of last resort to banks